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Closing Bell

News/Business. Maria Bartiromo, Bill Griffeth. A guide through the most important hour of the Wall Street trading day. New. (CC) (Stereo)

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01:00:00

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Us 12, Joe Biden 11, Michelle 5, Paul Ryan 4, U.s. 4, Europe 4, Geico 4, China 4, S&p 3, Gary 2, Martha 2, Jack Kennedy 2, Omb 2, Dell 2, Biden 2, Brad Sherman 2, Charles Schwab 2, Michael 2, Fha 2, Lakers 2,
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  CNBC    Closing Bell    News/Business. Maria Bartiromo, Bill Griffeth. A guide  
   through the most important hour of the Wall Street trading day....  

    October 12, 2012
    3:00 - 4:00pm EDT  

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thank you very much, jane wells. >> you're welcome. >> a lot of money. all right. thank you for watching "street signs," everybody. use the lock feature on top of your phone. save your city or county some money, please. that's one to grow on. >> little tip. "closing bell" is next. welcome to the "closing bell." i'm michelle caruso-cabrera in for maria bort rartiromo. it's going to be a close one, folks. >> up a little bit right now. i'm bill griffeth with my lock feature on my phone right now, as a matter of fact. nasdaq under pressure. could be set for a six-day losing streak. earnings out of jpmorgan chase this morning and wells fargo especially doing little to lift this market. both stocks under pressure today as are all the bank stocks as we head into the home stretch here. speaking of wells fargo, don't miss our first on cnbc interview with chief financial officer timothy sloan. we'll get his take on the earnings and his thought of the
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state of the consumer, whether the housing market will come back. we'll also ask him about legal challenges facing that bank that came out just this week. but first, here's how we stand right now. this trading pattern chart will look familiar. it's been like this all week. you buy in the morning. you sell in the afternoon. right now the dow is in a comeback mode, up 3 1/2 points. the nasdaq, though, still the lagger. down a franks at 3,048. also coming off the lows of the session set about an hour ago. the s&p is down three points. now at 1429. >> let's go to our hampton pearson with breaking news on the deficit. hampton. all right. we're going get to hampton in a second. >> we'll wait on that breaking news. >> yes, exactly. >> in the meantime, less than an hour to ago, this trading day, is the dow going to go lower for the fifth session in a row? a five-day losing streak may not be a huge red flag for some
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people, but pension partners says u.s. markets are behaving in a way that suggests either a correction or something more severe may be on the way. >> in today's "closing bell" exchange, we have pension partners and our own rick santelli. michael, the signals that the markets are sending, boy, it's been going on -- hold on, folks. let's go to hampton pearson with breaking news on the deficit. >> michelle, from the treasury department and the omb, the final results on the 2012 deficit, and here are the highlights. the fy-2012 deficit was $1.89 trillion, $207 billion less than the 2011 deficit. the 2012 deficit came in lower than previously forecasted as the treasury department and omb. $121 billion less than forecasted at the mid session review. as a percentage of gdp, says
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treasury and omb, the fy-2012 deficit was 7% down from 8.7% in fy-2011. the reduction from last year was due to higher receipts and lower outlays resulting in part from a stronger economy. also, a statement from treasury secretary tim geithner accompanying the release of these budget details. quote, the president has put forward a balanced proposal to further strengthen the economy and reduce the country's future deficits. it's time for congress to act on those necessary steps to it help sustain economic growth for years to come. of course, to add the fuel to the budget and deficit debate, fiscal cliff, and obviously ahead of next week's all-important debate between president obama and mitt romney. back to you guys. >> it's going to be fodder for our next conversation, i'm thinking. >> absolutely. right now it's not yet moving the markets if it's going to do that at all. >> michael, we were talking earlier that there are signals
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you see in this market which suggest a correction is coming. tell us what they are. is it the pattern we've seen this week? are some of the fundamentals behind it? in other words, that fight coming over the fiscal cliff related to the news that hampton was just give us. >> i think forget about looking at where the absolute price levels are for the s&p, the dow jones, et cetera. you have to look at what's happening within the market. after qe-3, something curious started occurring. the deflation trade started coming back. bond yields started dropping. utilities, health care, consumer staples, the bear trade, those are outperforming. small caps, which are very much domestically oriented, are weakening very, very much here. there's no real beta sentiment that's comfortable with taking risk. whether that's because of the fiscal cliff, i think that could explain what's happening here. underneath the surface, there's something very unusual, and i would borderline say disturbing in terms of reaction post-qe-3.
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>> for viewers who don't know what a deflation trade is, it means you're really worried about a declining economy. >> stephanie, you're the savvy trader. is that the message you're getting from the market right now? >> well, i think the fact we've had a really nice move from the june lows, and we have these questions about earnings, about the fiscal cliff, about the election, about global growth. it's kind of natural to see a pullback or at the very least, just some volatility. i think you want to make your shopping list. i do believe we get through earnings, get through the fiscal cliff, and get a compromise. i think between now and the end of the year we can rally, especially since we have the global fed monetary policy around the world extremely easy. that should be supportive for the overall market to the end of the year. >> so eric, michael sees something pretty hominous in th moves in the market.
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stephanie is suggesting maybe it's a pause. what do you think? >> well, we wouldn't be surprised to see somewhat of a choppy earnings season, which will create some opportunities to go in and buy some mispriced companies if that does create opportunities. probably even more so than what we've seen over the last couple earnings seasons. but, you know, as far as the market correcting here, we've had one of the most bull markets here over the last couple months. over the last couple weeks, there's been a widely anticipated correction. we started to see a little bit of that. so although the market may pull back here a little bit, we don't think it'll be too severe just from the standpoint of sentiment has really become negative regulartively quickly. >> rick santelli, the water cooler talk today is about whether or not spain will come hat in hand to the ecb as early as this weekend. are you expecting that? are you trading on that? what's going on?
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michelle is already shaking her head. >> traders think that they should ask for the rescue/bailout, but i think they're starting to agree more and more with michelle, which makes the following story that much stranger. you know, ft about an hour and 15 minutes ago beat everybody on what is growing to be a big story. royal bank of scotland, the big bailout they had from the u.k., well the european commission ordered them to liquidate some assets. in 2010, they decided to sell about 320 branches. this was about a $1.6 billion -- excuse me, 1.6 billion pound deal. but the plug was pulled on it. exactly why, there's no comment. but many think it's a deterioration of the balance sheets and the economy in europe. also, it might be more of an aftermath of issues that are haunting royal bank of scotland.
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in either case, it shows a deterioration that might be a big story coming into next week. >> spain's not asking for a bailout, rick, until their interest rates rise. that's it. maybe they should. >> they have the window now. >> right, right. but they won't use it. back to the markets here. stephanie, what did you do at this point? >> well, we have some cash on the sidelines and wanting to put some of it to work on extreme reactions to earnings. so for example, today in the banks, jpmorgan posted an amazing number considering the environment that we're in. revenues were very strong, expenses were good. >> would you buy them on this dip? >> i would definitely buy jpmorgan. i think everyone is making a big deal about wells fargo being down. nims have been under pressure for years. >> net interest mare -- margins.
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>> right. thank you, all. have a good weekend. we'll watch for that story, rick. >> 51 minutes before the closing bell. the dow jones industrial average is lower by nearly six points. the nasdaq is lower by 2 1/2. >> don't go anywhere. we are just getting started on this very busy friday edition of the "closing bell." coming up, wells fargo in the house. the bank cfo talks earnings, the ongoing fhfa investigation, and the health of the real estate sector. plus, telling signs. both jpmorgan and wells fargo beat earnings, but which is the better buy for your portfolio? and are you kidding me? what's more ludicrous, two congressional candidates almost coming to fisticuffs at a debate, or the european union winning the nobel peace prize?
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okay. a little over 45 minutes left in the trading session. if you're just joining us, let's get a quick market stat check on the dow specifically. i mean, this is like the baseball playoffs lately. you think you have the series wrapped up, then they come back and you go to a game five. the dow higher on the open. looked like we have our first positive day of the week. then a selloff. wouldn't you know. now we're down two points at 13,324. the dow is on track for its worst weekly decline since early june. so it goes back through the summertime. despite jpmorgan chase and wells fargo's better than expected earnings, financials have been lagging along with telecoms and the utilities today. the financials index itself hitting its lowest level in a week first half. >> that can be problematic. people see the financials as a
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leadership group. >> absolutely. >> where they go is where the market tends to go. wells fargo stock under pressure today, in fact, despite a 22% jump in net income for the third quarter. here's what's interesting. a good chunk of that growth coming from its mortgage business. no doubt housing optimism is gaining traction today. take a look at what the financial times has today. roger altman positive on housing saying the industry should see a boom by 2015. >> and he's not alone on that. >> sounds far away though, doesn't it? >> but let's not forget that's the benchmark where the fed is going to keep rates low until that point. today, jpmorgan's jamie dimon said he believes housing has turned a corner. wells fargo's chief financial officer tim sloan joins us first on cnbc so size up the housing market and their quarter for us. tim, good to see you. welcome back. >> hi, bill. how are you? >> doing well. do you agree -- i imagine you do, but to what degree do you see a recovery in housing right now? >> we see a recovery in the
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housing business, and it's actually pretty strong. we started to see it in the nondistressed portion of the business last year but really beginning in the second quarter we have seen a sustained recovery. we're very optimistic in the housing business. >> can you define housing recovery? it's in the eye of the homeowner if they're very under water. recovery could be very far away if you would just like to see a transaction get done and volume spike in sales. that's a different way. with you say recovery in housing, define it. >> well, i think what we've been seeing in the statistics over the last few months is an improvement in new housing starts, in housing prices, affordability is very strong right now and rates are low. you're right, michelle. it's really in the eye of the beholder and compared to where values were a few years ago, they're still down, but they're on their way up. >> you know, we pointed out you and jpmorgan, your shares are both down today despite better enings.
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although, your revenue is a little light. one thing analysts are pointing to is the decline in your net interest margin by 25 basis points. they're worried about it, but you said you're not managing to the margin right now. why? >> well, that's correct because what our shareholders care about is earnings per share and not necessarily net interest margin. net interest margin is a portion of how we generate our income. we generate about 50% of our revenues from spread income and about 50% from fee income. >> i guess the fear is that that spread will continue to narrow because rates are so low right now and people are refinancing so much, so many of the mortgages you may be holding may be now at a much lower rate. >> i think that's fair, but the important thing to think about is we have a very diversified set of businesses. if you look at the net interest margin year over year, it's down 18 basis points. we've had four consecutive quarters of record earnings during that same period.
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again, we feel very, very confident in our ability to grow earnings, even in the slow interest rate environment. >> i'm assuming you like what ben bernanke has said when it comes to qe-3 and buying mortgages, et cetera. at the same time, that means that you've got this very flat yield curve, right? tell me about the trade-off there. what would be better? are you happy with this? >> well, we're happy to perform in any sort of environment, michelle. i think what you've seen in wells fargo over the last decade is earnings growth through a lot of different periods, whether we've got a strong economy, a weak economy, a high interest rate, low interest rate. again, we have a very customer-focused, diversified model, and we can perform. we've had 11 consecutive earnings of growth even in the bumpy economy. >> we would be remiss if we didn't ask about this lawsuit taking you to task for a
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mischaracterization of mortgages. you're not alone in this. other banks have been sued and settled on these same charges, on reckless lending. where do you stand on that? what's your response to it? >> well, the allegations in that lawsuit are just that. they're allegations. they're not facts. we're going to defend ourselves very vigorously. we're the largest fha lender in the country. we think the fha program is a terrific program. it's helped millions of americans obtain their dream of homeown homeownership. we're proud to be part of the program. our record in terms of our factual record, in terms of the performance of the loans that we've underwritten really speak for themselves. >> so are you taking a decidedly different approach than these other banks that decided to settle and you're going to push if further and defend your case? >> we're going to defend ourselves, and we're going to do the right thing for our shareholders. >> do you think this could have a material impact on your earnings when you bear in mind bank of america, a big competitor of yours, but you're the biggest mortgage lender out
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there, they settled for $1 billion. >> we do not believe it's going to have a material effect on our earnings. in fact, as i mentioned on the earnings call today, we take into consideration any potential liability in our legal reserves this quarter. >> so much of the mortgage business you're doing right now is refis. we talked about this earlier. what's preventing people from actually going out and buying a home instead? is it because they can't get credit from banks like yours, or is it because they're too fearful and they don't want to buy a new house? >> well, i think it's a number of things, but i don't think it's because they can't get credit from a bank like ours. 25% of our volume, and remember, we're going one-third of all the mortgages being done in the country coming from purchase money mortgages. we hope that increases. our folks are out there working very hard to try to continue that. >> let me broaden this out a little more. your sense of where we are in the economy. you feel housing is recovering
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in many ways here. what does that say about the overall economy? we're still hovering around 8% on unemployment. are we seeing any improvement overall in the economy in your view? >> i think we're continuing to see slow but steady growth in the economy. it's not as good as any of us would like. you're absolutely right, bill. unemployment is stubbornly high. we're very concerned about the onset of the fiscal cliff and how that all works out. longer term, we're very bullish on the economy. we think that's not only good for our customers, but it's very good for wells fargo. >> jpmorgan's jamie dimon the other day at a discussion of the cfr said they actually have a war room ready to go for the fiscal cliff. are you going as far as that? >> well, we don't call it a war room. what we call it is just good risk management. there's lots of risk out there in the financial services industry. we've seen a lot of them -- >> but are you stepping it up for this event? possible event.
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>> no, not at all. not that we're not concerned about it, but it's part of our general risk management practice. >> very good. tim, good to see you again. thank you for joining us. appreciate it. >> thank you, bill. thank you. >> you bet. tim sloan, cfo of wells fargo. >> so are you better off buying shares of wells fargo or the other big banks reporting earnings today? jpmorgan chase, the other big bank. that trade is next. with so many minutes left to go here, about 40 minutes left, i'm still thinking about the war room on the fiscal cliff. we have the dow up four points. maybe we will finish positive for the first time this week. >> that big, toothy grin from joe biden last night, didn't that steal the show during the vice presidential debate?
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our political pundits and cable talking heads paying too much attention to the debating style of the candidates and not enough to their substance. >> we expect democrats and republicans to argue on this, but you know atmosphere in washington is toxic when two members of the same party can't even get along. so more of this incredible video. and i know both of these guys. >> you do? oh, my gosh. >> it's unbelievable what these guys are doing here. i'm ashamed for both of them. they are both saying they're apologizing for it. we'll get to that coming up. >> okay. so you know that maria bartiromo has already starred in "wall street never sleeps." what about this stroll through the park with matt damon? uh-huh. jealous. a preview of her next big screen appearance. you're going to have to stick around to find out.
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some good news for consumers finally. gas prices falling today sharply. sharon is here with the details. >> that's definitely been the biggest mover here in the energy complex today, michelle. we're looking at gasoline futures down more than 2%. they were down as much as 3% earlier in the session. a lot of the weakness that we're seeing here has to do with the slide we've seen in the cash markets here on the east coast as well as in california. as we have seen there, of course, the regulations there for winter grade gasoline, which is cheaper, going into effect a few weeks earlier. that has certainly helped increase the supplies there. that's helped bring down prices. we're still looking at the lowest prices in a week's time.
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we're looking at $3.81 a gallon. still, 12% higher than what you were paying a year ago. back to you. >> and i filled up last night. wouldn't you know it. thank you, sharon. okay. shares of both wells fargo and jpmorgan chase lower today despite those better than expected earnings that they reported this morning. of the two, which is the better buy going forward? or have the financials simply topped out overall? let's talk about that today in "talking numbers." gentlemen, good to see you both. david, you first. your reaction to the earnings. does this selloff today for you represent a buying opportunity? >> yes, it does, bill. both companies, as you said, reported better than expected earnings. jpmorgan actually had a much better than expected number, $1.40. i'd say the operating earnings were more like $1.45 versus the
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consensus of $1.19. wells fargo, also above consensus, but only by one cent. >> they were record earnings. mortgage origination was up as well. what about the charts? >> it's difficult because you need to give some time for this new information that was just released into the markets to filter into the charts. what i like to do is look at the longer term picture. looking at jpmorgan, we see that jp had a difficult time moving through resistance around the $47 area. we're currently 5 to 8%. the momentum, they want push up higher. looks like that resistance area is drawing up the like a magnet. shorter term, there's a nice trade for japan por began pmorg higher. >> okay. wells fargo? >> longer term, i like this chart better. we look back to the 2009 market lows. we see a very strong, defined,
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and respected resistance level until a few weeks ago where we actually broke the resistance. now, technically what usually happens is a stock will break the resistance. that will turn into support. we're in the process of seeing if this actually happens. so we're right on support. i want to take a step back, see that support kick in. if it does, then i would enter. >> what level is that? >> we are right around the 37 area. >> okay. all right. we'll keep an eye on that. again, that's on a weekly basis. >> and if you want to use a 3% threshold, there's multiple time frames. >> all kinds of qualifiers on that one. david, what about you? who would you buy? >> i have buy ratings on both stocks. it's a little like asking me which of my two children i love more. >> who would that be? >> the answer is i love them both. between the two bank, there's probably better fundamental opportunity in jpmorgan. it's trading at a slightly lower multiple of expected 2013 earnings. it's trading at a lower multiple of tangible book value.
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with jpmorgan, you have the potential for more of an upside surprise if the capital markets continue to increase in volume. jpmorgan has a much larger inveinve investment bank. if we see better volume through the capital markets because of the stimulus by the fed and the ecb and central banks around the world, there's a greater upside, i think, in jpmorgan. >> okay. very good. thank you, both. thank you for joining us today. >> bill, the dow is struggling around that flat line. lower right now by one point on the nose. the nasdaq is lower by a little more than three points. about 30 minutes before the closing bell. last night's vice presidential debate getting pretty testy. >> it is mathematically possible. it's been done before. it's precisely what we're proposing. >> it has never been done before. >> it's been done a couple times, actually. jack kennedy lowered tax rates -- >> oh, now you're jack kennedy. >> but all the headlines are about whether or not joe biden
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and paul ryan were being disrespectful through laughter and smirks. mostly joe biden. why isn't there more focus on the substance of the debate? that's next. also ahead, defense secretary leon panetta says the u.s. is at risk of a cyber pearl harbor. who could be behind such an attack? how do we prevent it? that's later on the "closing bell." tdd#: 1-800-345-2550 when i'm trading, i'm totally focused. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 and the streetsmart edge trading platform from charles schwab... tdd#: 1-800-345-2550 gives me tools that help me find opportunities more easily. tdd#: 1-800-345-2550 i can even access it from the cloud and trade on any computer. tdd#: 1-800-345-2550 and with schwab mobile, tdd#: 1-800-345-2550 i can focus on trading anyplace, anytime... tdd#: 1-800-345-2550 until i choose to focus on something else. tdd#: 1-800-345-2550 trade at charles schwab for $8.95 a trade. tdd#: 1-800-345-2550 open an account and trade up to tdd#: 1-800-345-2550 6 months commission-free online equity trading tdd#: 1-800-345-2550 with a $50,000 deposit. tdd#: 1-800-345-2550 call 1-866-294-5412. stop! stop! stop! come back here! humans -- we are beautifully imperfect creatures
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well, in the wake of last night's vice presidential debate, there seems to be a lot more attention on the candidates' actions on stage rather than their positions on policy. that's because politics is theater, right? vice president biden, for example, used laughter to waltz over the points that paul ryan was making. remember? [ laughter ] ♪ >> cnbc capital markets editor gary calls it rude. michael barr says vice president biden came out the real winner.
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what about the issues? did both candidates skirt the key issues here? both gary and michael join us now with their take on last night's performance. gary, you said if you were sitting next to -- if you were paul ryan, you would have punched joe biden? >> michelle, you would have as well. i mean, it was -- rude is a polite way of saying what it was. it was disgraceful. it was arrogant. it was immature. it was unprofessional. it was disgraceful. >> does it -- okay. so what if i agree with you on all of those things. bottom line, though, isn't this supposed to be about the substance, or is that relative? >> i guess i'm a boring person. i really tuned in last night. i wanted to hear something about dividend taxes. i wanted to hear something about capital gains. i thought there would be an actual discussion about some of the various issues this country is going to have to face. >> remember last week, though, gary. last week both the presidential candidates were taken to task
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for conducting what was thought to be a seminar because they got a little too deep into the weeds. maybe they were trying to avoid that last night. >> well, you know, bill, i'm sorry. i felt last week's debate was something where i learned something. i want to learn something. what i learned last night, again, no disrespect, but what i learned is that joe biden can probably interview for a jb for ronald mcdonald or bozo the clown in several months because that laughing and that big smile, that's what it is. it's bozo the clown. >> what, you didn't know joe biden as an irreverent guy to begin with? a little more free willing. >> bill, there's one vice presidential debate. you'd expect a little bit more. i have seen joe biden in other settings. disappointing appearance last night. >> michael, what did you think? >> i thought the vice president was terrific. i thought he made clear what the contrasts are between the candidates. it was a substantive debate. the vice president outlined differences on medicare, on social security, on taxes, on carried interest for hedge
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funds, you name it. all the issues that i think the american voters really care about came up in that debate. the vice president really delivered on clarifying those differences. >> what about the issues pertaining to the performance itself? was he being condescending with the laughter, do you think? >> i think this kind of commentary on the facial expressions of candidates is getting away from the real issues here. the vice president, i thought, did a powerful job explaining the substantive differences between the candidates. on medicare, the vice president's stand to protect medicare. >> you don't think viewers -- >> i think the substance matters. >> i'm being joe biden here as i interrupt you. you don't think that viewers actually look at the way some people treat each other on television? i know i get e-mails about that all the time. they judge those people for those reasons. you don't think that that might hurt the vice president? he can do all the things that
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you said and yet still they could look back and say, that didn't look very vice presidential, did it? >> i think your viewers, as you suggested, are used to people being interrupted occasionally. that's not a sign of disrespect. it's a sign of the urgency of the matters that are being debated. the vice president feels very strongly about these issues. you saw his passion and his commitment to standing up for the middle class in that debate. i think that was exactly the right thing to do. >> michael, let me interrupt you now and say i don't know what they're saying in ann arbor, but here in manhattan, people who are obama supporters are disgraced. they were embarrassed. people have said to me all day here in new york that this was a nonprofessional, disappointing, joke of an act. you cannot sit here and seriously tell me -- >> strongly disagree with that. i think that's exactly wrong. i think the commentary gary made before is disrespectful to the vice president. i don't think the vice president
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was at all disrespectful to congressman ryan. it was a serious debate. >> he interrupted him a number of times. >> you're interrupting me, but i don't think you're disrespecting me. >> if i were martha i would have been upset with joe biden. three times he turns to her and says, wait, wait, wait, he got 40 seconds, you're going to give me 20? >> i thought she did a fine job. >> she did, but he was constantly criticizing her. >> i think martha did a great job. >> but joe biden told her repeatedly he didn't think so. >> i disagree. he was setting the rules of the game. he was taking the issues to the american people on medicare, on social security, on taxes. he was saying, who do you trust more, this guy who wants to voucherize medicare, this guy who wants to privatize social security, this guy who wants tax cuts for the wealthy, and he wants to raise taxes for the middle class. which team do you trust more? i think that was exactly the right conversation to be having with the american people. >> all right. got to go. >> none of it was funny though.
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he thought it was. >> i think it was a very serious debate. he showed when it was appropriate to take those comments seriously. >> michael, you show why that laughter was interpreted as somebody who's being immature and insecure. you're a perfect example of what the american people saw. >> okay. we got to go. >> we can disagree with that. >> thank you for joining us today. >> see you later. >> let's go to bertha coombs with a market flash. >> google shares are moving lower on a reuters story that the ftc may be moving closer towards a google anti-trust case probing the issue of search. at this point they're citing some unnamed sources, as you can imagine. google shares moving to the lows of the session. google on pace to close down for the week for the first time in three months. back to you. >> wow. the ftc has just been all over. >> they've take an long time on this one too.
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and you saw what google stock was doing as a response of that going down. as is the rest of the market with about 20 minutes left. the dow is down ten points right now. >> so will the scarily october carry over into next week when earnings season really does get kicking into high gear? that discussion is next. >> also, why did oracle ceo larry ellison take out a $4 billion line of credit? that's what maria bartiromo asked him recently, remember? >> if i wanted to buy something like the los angeles lakers, i could buy the los angeles lakers. they're not for sale, but -- >> but you'd like to buy them? >> sure, i'd love to buy the lakers. >> are the lakers really on ellis ellison's shopping list, or is he eyeing another deal in the sports world? very intriguing deal. stay tuned.
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let's develop more stars in education. let's invest in our teachers... ...so they can inspire our students. let's solve this. the nasdaq threatening to post its first monday through friday decline since mid-may. seema mody is at the fnasdaq wih the details. >> that's right. it's been a bad week for tech stocks, which is weighing the market down. apple down nearly 10% over the past three weeks. there are some bright spots, though. check out biotech.
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celgene selling its cancer drug. it's currently investigating the role in treating other forms, including pancreatic and melanoma. that's a common trend we continue to see in the biotech space, finding multiple uses of one drug, making it much more versatile and profitable. back to you. >> and the stock is up a percent. tough to find anything that's up that much today. thank you very much. tight trade for stocks as we head into the close here this friday. a lot could drive the markets next week. we want to look ahead. among the companies reporting earnings, key financials. goldman sachs, bank of america, intel, and microsoft. both those sectors have been the major pillars for the equity market this year. how might these numbers affect sentiment next week? >> gentlemen, nice to have you both here on the set. david, your assessment of what earnings season is going to look like next week, considering this
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week we've had declines every day. >> michelle, bob, bill, the negative preannouncements are leading the positive preannouncements by about four to one. we're looking for earnings to be down in line with the consensus about 3%. more important to us is the fourth quarter and then how they're guiding for next year. our own people think that you're going see lower earnings next year versus the consensus. consensus up $116. we're looking for $98.70. >> we're expected to do about $103 this year. >> that's the consensus. we're at $100, bob. we're below that $103. we're at $100 for this year. down mainly because of europe, slowing economy in the u.s., low interest rates means lower earnings for the financials. that's the essence of our feelings. plus, the consumer is expected to slow down next year. >> well, this is important because a lot of people -- there
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are some people who believe we're at a trough in earnings right now and we'll start coming out of it. you say that's not the case. >> not the case. we think earnings are going to be lower for financials, energy, materials, commodity prices coming down, global growth slowing down. in addition to europe, you have kmooi china coming in 7, 7 1/2. bridge water is looking at 4 to 5% for china. that's an out of consensus call, but we see china slowing k significantly. you saw the imf decreased. >> i'll tell you the one i want to see next week. ibm is on tuesday. half of their business is recurring services, recurring subscriptions. i'll bet you you'll find that's going to be a very important part of their business and it's growing.
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ibm will either beat and then raise their estimates. from what i hear, their subscription-based models are doing really, really well. i agree materials are looking difficult. >> thank you, guys. >> we got to go. >> we got 13 minutes before the closing bell. the dow is high r now er now by points. >> just how nasty is the political climate right now? two sitting congressmen out in my old neck of the woods in the san fernando valley nearly coming to blows during a debate last night. the crazy party is they're from the same party. stick around. you don't want to miss this story. >> bill griffeth knows both of them. >> i'm so proud. mortgage rates may be near historic lows, but somebody here says they should be even lower. banks are making a killing by not lowering them even more. ♪ [ male announcer ] how do you make 70,000 trades a second... ♪ reach one customer at a time?
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the vice presidential debate between joe biden and paul ryan was the main event last night. but another debate really stole the show.
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the kicker was it was between two people from the same party. two democrats. >> two long-time democratic congressmen, brad sherman and howard berman. they nearly came to blows during their debate. there goes brad going after howard. howard will retaliate. they're locked in a bitter battle after redistricting left them in the same district in los angeles. if i lived in l.a., brad sherman would be my congressman. a police officer had to step in before things turned ugly. both of them have come out today and, you know, expressed contrition. like i said, i know both of them. i'm stunned either one would do that. i mean, look at it. >> bill, they both bow to the god of re-election. >> as alan simpson said the other day. that is bizarre. anyway -- >> so from war to peace. the european union winning this year's nobel prize.
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not an individual. >> the whole european union. >> the whole thing. even as it faces the threat of disintegration from its crippling debt crisis -- why are we showing ining this video? there you go. >> these are the winners of the nobel peace prize this year. >> and this is a calm picture. >> trust me, it's going to get better, right? let's not forget, who awards the nobel prize? the norwegians. they're members of the eu. they just gave themselves the nobel peace prize, right? >> they seem to think they were encouraging the european union to keep going and that this would be helpful in some way. i think it's absolutely absurd and ridiculous. >> a little disingenuous. >> completely disingenuous and insulting to the people suffering on the ground. makes no sense to me. >> that one, i can't wait to see the acceptance speech on that one. >> you're right. who's going to do it? >> or what are they going to
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say? >> maybe the prime minister of greece. >> i don't know. >> coming up next, we're going to come right back with the closing countdown. >> it's a squeaker. unchanged right now. amaz amazon ceo says the company makes no profit when they sell a kindle l. one guest coming up says that's proof amazon's business model is severally flawed. >> but here's the question i really want to know. why does maria get to hang out with matt damon? >> you have to ask? >> you'll have to stick around to find out. you're watching cnbc, first in business worldwide. this is awesome! folks who save hundreds of dollars switching to geico sure are happy. i'd say happier than a slinky on an escalator. get happy. get geico. melons!!! oh yeah!! well that was uncalled for. folks who save hundreds of dollars switching to geico sure are happy.
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oh, hey alex. just picking up some, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race. no need to get nasty. here's your "honk if you had an affair with taylor" yard sign. looks good. [ male announcer ] fedex office. now save 50% on banners. ♪ [ male announcer ] this is karen and jeremiah. they don't know it yet, but they're gonna fall in love, get married, have a couple of kids, [ children laughing ] move to the country, and live a long, happy life together where they almost never fight about money. [ dog barks ] because right after they get married, they'll find some retirement people who are paid on salary, not commission. they'll get straightforward guidance and be able to focus on other things, like each other,
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which isn't rocket science. it's just common sense. from td ameritrade. four minutes left. we have no idea whether the market's going to finish higher or lower. that's statistically significant just because it would be the fifth day in a row for the dow that the market would be down. first time that's happened since may. i want to focus on this for a second. this is a pattern chart that the investment group has identified since the market peaked in mid-september. what's been happening lately is in the morning you get the
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buying, which they see as the dumb money. the smart money has been selling in the afternoon. now, let me show you what the dow did today. this is going to look very familiar. there it is, right? this has happened every day this week. so for the week, as we show you the dow weekly chart, look at that. it's the same kind of pattern on a weekly basis. the best and worst performing stocks in the dow this week, mcdonald's was the highest. home depot got slams, down 5.6%. kenny, what do you make of that? >> it feels just like we talked about a week ago. the market felt exhausted. technically we've broken on the s&p future. the market's been kind of flirting with that all week. they've been forcing it to try to close above there to hold it until the market isn't broken. in fact, today we'll end up closing below it, so that will set us up for a bearish feel next week. >> a lot of news flow next week. you've got industrial
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production. you have the empire state -- >> chinese gdp. >> another presidential debate on tuesday. >> that's right. but after the -- >> and lead indicators on thursday. this week, you add in earnings. it's going a very heavy week. >> speaking of chinese gdp, the ceo of international paper was here with us this week. he said he believes that based on their perception of the chinese economy right now that their gdp is closer to 2% than it is 8% right now. >> that would basically belie -- iron-ore prices have come up 12% since golden week when they took a week off to celebrate the communist party's founding 49 years ago. okay, but iron-ore prices have started to recover as has the chinese stock market. it's still in negative territory, down 4% on the year. so that is a very outlying --
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it's even weaker than -- >> that means you don't believe it, that we shouldn't worry about it? what does it mean for the market here in the u.s.? >> we should be worried about china more than europe. yoou europe has calmed down. >> my fear is i think that's what people have to really pay attention to. >> michelle, if those numbers come in weak next week, well below seven, that's going to be destabilizing to the market. >> lights out. >> you have been skeptical about this rally into the september highs anyway. how much lower do you think we could go? >> i think we broke it technically. we're in this new trading range by the 250 day. i really think 1400, 1410 is probably the next stop. >> all right.

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